Tips and tricks to help you save thousands with tax return
With the end of the financial year fast approaching, a tax expert has compiled a list of tips and tricks to help people get the most out of their tax returns.
H&R Block’s Director of Tax Communications Mark Chapman said navigating the tax system could be ‘quite overwhelming’ but with expert help could be managed.
In a statement to Daily Mail Australia on Thursday, Mr Chapman said there was a list of everyday items, including sunscreen, make-up and even sex toys, workers should claim if they wanted to get the most back.
While the end of financial year was still months away, Mr Chapman said there were a number of easy steps to take now in preparation.
Financial expert James Solomons said taxpayers could claim on designer handbags – provided the price tag reflected the owner’s business revenue
If a person prepays some bills, they can claim the expenses back this year, rather than next.
‘You can claim a tax deduction this year for expenses which wholly or partly relate to next year. So, if you have some spare cash, consider paying things like union fees and professional subscriptions,’ he said.
Mr Chapman said it was also a good time to donate money to charity, as anything over $2 could be claimed back.
Mr Chapman said sunscreen could be claimed by anyone working outdoors.
‘If you’re an outdoor worker, such as a tradie, construction worker or farmer, you can claim sunscreen. Other outdoor related attire can also be claimed, such as hats, gloves and clothing,’ he said.
In good news for women, Mr Chapman said even make-up and handbags could be claimed.
‘If makeup has sun protection and you’re required to work outdoors… some specific types of make-up, such as rehydrating moisturisers, can also be claimed,’ he said.
Mr Chapman said handbags used for work purposes, ‘to carry phones, calculators, stationary and anything else needed for work’ were also on the list.
‘You might struggle to claim that new Gucci bag, but a more modest bag, genuinely used only for work purposes, should be claimable,’ he said.
Other surprising expenses Australians could claim included art, education, electricity, shoes, and even Xbox consoles.
An accounting expert has compiled a list of secret ways you can save money on your tax return (stock image)
Mr Chapman said a dog owner could also claim some of the costs associated with their pooch, if it was used for security or agricultural work.
If a business owner requires a security dog to patrol the premises or if a dog is used in farming, business owners can claim maintenance costs like food and vet bills, and depreciation on the animal.
Mr Chapman also listed sex toys as a claimable expense.
‘Sex toys are just as much a tool of the trade of a sex worker, erotic dancer or prostitute, as a wrench or a spanner might be for a plumber,’ he said.
‘If the sex toy is for your own personal amusement however, a deduction isn’t available.’
What are the top ways to get the most out of your tax refund?
Working from home?
· Airconditioning/ heating, and any lighting
· Depreciation of any home office equipment including computers and stationary
· Internet and telephone bills can also be claimed
Studying a course connected to your current employment?
· Claim textbooks, course fees
· Your accommodation and meals – if you’re studying away from home
· Internet costs
· Laptop costs, and the laptop’s depreciation
Keep your proof of purchases
· Keep receipts for anything work related, if it cost more than $300 – anything less than $300 does not require a receipt
· Electronic copies of receipts will be deemed legitimate
Claim expenses incurred in earning income
· Transport to and from work when visiting any clients or suppliers
· Travel, meals and accommodation
· Claim any tools and other equipment used for work
· H&R Block advise people not to inflate their deductions – and only claim items that could be supported by documentation
· If not, people could face penalties by the ATO
Don’t make silly mistakes
· If someone gets their address wrong, or their details are not up to date, the ATO will not be able to match your tax file number
· Get spelling right – because any mistakes can hold up a return
Tax payers who use their own dogs for work, such as guard or cattle dogs, can claim veterinarian and food bills (German shepherd stock image pictured)
The Tax Office also allows Australians to claim for sunglasses deductions when a worker is exposed to the sun.
But Head of accounting at Xero James Solomons previously warned there were dangers of claiming exorbitant amounts of money on a pair of sunglasses for working purposes.
‘If you go and try to claim a $400 pair of Prada sunglasses, but you’re a plumber, you’re going to get a few questions asked,’ he told Daily Mail Australia.
Mr Solomons said education and training were both tax deductible, as were portions of your electricity, gas and water bills if you run your business from your home.
‘If you travel to remote locations to work for extended periods, you may be able to claim the costs of a caravan or Winnebago,’ he added.
Sunscreen: If your job means you work outside for a lot of the day, you are entitled to claim on sunscreen and makeup that has an SPF factor
Mr Solomons (pictured), head of accounting at Xero, said Australians could legitimately claim dogs, sunscreen, handbags and electricity bills as tax deductible expenses
ATO tax return tips
Vehicle and travel (including travel between work and home)
Clothing, laundry and dry-cleaning
Gifts and donations
Home office expenses
Tools and equipment
While there are some bizarre deductions that can be claimed, the ATO urged tax payers to remember three golden rules when lodging their returns.
‘One, make sure you spent the money yourself and were not reimbursed,’ ATO Assistant Commissioner Graham Whyte said.
‘Two, make sure it’s related to your job.
‘And three, you need a record to prove it.’
Finance expert’s DOs and DON’Ts
DO: Speak to an accountant before filing your tax return.
DO: Keep receipts for everything you buy that has a direct connection to your employment. Without receipts you are not entitled to claim any deductions.
DO: Use an online service to auto-scan your receipts and keep digital copies.
DO: Check online to see what work-related expenses your specific industry is entitled to.
DON’T: Think you can claim something because your colleague claimed it.
DON’T: Think you can get away with not including all aspects of your income, including making money on investments. The ATO has sophisticated data capable of detecting dodgy tax returns.
If you travel to remote locations to work for extended periods, you may be able to claim the costs of a caravan or Winnebago